UK sponsorship rules: wider immigration, employment law and tax considerations for employers

Employers in the United Kingdom looking to recruit from overseas must meet strict immigration rules and balance these with domestic employment law and tax compliance. Sponsorship is more than a visa gateway: it creates long-term obligations in HR practice, workforce planning and corporate governance. This guide explores the broader issues employers need to consider.

 

Securing a sponsor licence

 

The starting point is the opting for the correct type of sponsor licence, based on the route required (e.g. Scale up sponsor licence, UK Expansion Worker sponsor licence, Global Mobility sponsor licence) Employers apply for a sponsor licence online through the official government portal (which is different to the UK visa application login system). The application includes a form and must be supported by supporting documents, such as evidence of trading and robust HR systems.

The detailed evidence requirements are explained in Appendix A, covering the documents needed to prove trading status and HR systems.

The Home Office sponsor licence application fee will depend on company size and licence type, and organisations should also factor in the immigration skills charge which applies each time a Certificate of Sponsorship is assigned. Self sponsors under the Skilled Worker sponsor licence route should also check the self sponsorship visa UK costs.

Sponsors must stay up to date with the official sponsor guidance and embed processes into daily operations. These include recruitment compliance, right to work checks and reporting worker changes in the sponsor management system via their nominated Level 1 users.

The list of companies that can sponsor visa in UK is published by the Home Office as the Register of Licensed Sponsors UK (formerly known as the Tier 2 Sponsor List under the previous PBS licence system). Employers should monitor their entry on the UK sponsor list to ensure details remain correct. For individuals, there are routes such as the sponsorship visa UK, but employers need to understand that assigning a Certificate of Sponsorship creates shared responsibilities between the company and the migrant worker.

 

Licence compliance risks

The Home Office monitors compliance through audits and UKVI compliance visit inspections. Failures can lead to a sponsor licence downgraded decision, and potentially losing the ability to assign Certificates of Sponsorship.

In cases of alleged breaches, sponsors may face a sponsor licence suspension, and in serious situations a full revocation.

Employers must also act promptly to notify of important changes through the SMS or by filing a sponsor change of circumstances form when reporting business changes such as mergers, acquisitions or new branches. Failure to do so risks compliance action.

While there is no Tier 2 sponsor licence suspended list, or revoked sponsor licence list, omission from the Register of Licensed Sponsors means an organisation does not have permission to sponsor workers.

When planning workforce needs, factor in recruitment timelines. Many employers ask how long does it take to get a sponsorship licence in UK. The timeframe is typically several weeks, though delays are common where evidence is lacking. Employers may pay for the sponsor licence application priority service for fast-tracked processing. With a licence granted, priority services include the CoS allocation priority service and the post licence priority service to notify of important changes.

Employment law interacts directly with immigration duties. Sponsored workers enjoy the same rights as settled staff and must be issued compliant contracts. Redundancy, dismissal and TUPE transfers can all trigger immigration reporting obligations.

Some businesses turn to advisers such as sponsor licence solicitors or a sponsor licence lawyer to help navigate complex scenarios and mitigate risk.

 

Managing the sponsor licence

 

Sponsors should maintain oversight through a sponsor licence compliance framework that integrates employment policies with Home Office obligations. This includes documenting recruitment decisions, managing absence reporting and ensuring fair treatment to avoid discrimination claims.

Some employers seek assurance through external audits. Resources such as a sponsor licence check or a daily licence checker help confirm licence status and provide an early warning of issues.

The key personnel sponsor licence rules set out eligibility criteria for authorising officers, key contacts and system users. Non-compliance here can invalidate an application.

Employers should also be aware of the sponsor change of circumstances form obligations when business structures alter. Mergers or relocations often have wider employment law and tax consequences beyond immigration, and these must be managed consistently.

The sponsor licence cooling off period is another financial consideration. If a licence lapses or is revoked, employers may face delays before reapplying, leaving workforce plans disrupted. A worker may ask, can my sponsor cancel my visa in UK? The answer is yes, if sponsorship ends, their visa will be curtailed.

Every sponsor is issued with a unique sponsor licence number. This must be used consistently when assigning a Certificate of Sponsorship. Errors can result in visa refusals or compliance breaches.

While not mandatory, SMS level 1 & 2 user training is highly effective in ensuring personnel are able to manage the licence. Employers should refresh training regularly to prevent mistakes and ensure only authorised personnel have access to the SMS login.

Where a licence is refused, organisations can review options at sponsor licence refused, but should avoid repeat applications without first strengthening HR systems. For those already sponsoring, lapses can result in sanctions. In some cases, a company may appear on the revoked sponsor licence list, effectively ending their ability to sponsor.

While a sponsor licence renewal application is no longer required following updated guidance in 2024, sponsors must continue meeting all duties throughout the validity of their licence.

 

Additional compliance considerations

 

Sponsor duties and compliance overlap with broader corporate obligations. Employers must consider equality law, health and safety duties and pension auto-enrolment. The use of overseas workers through sponsorship does not reduce domestic obligations under UK employment law.

Sponsorship carries additional tax and payroll risks. Employers assigning a Certificate of Sponsorship are responsible for ensuring correct PAYE deductions. HMRC may scrutinise sponsored workers’ tax status closely, particularly if workers are recruited through intermediaries. The use of an umbrella company visa sponsorship UK model, while sometimes marketed to employers, raises compliance concerns and can attract both immigration and tax enforcement.

 

Conclusion

 

For UK employers, holding a sponsor licence is both an opportunity and a responsibility. It provides access to global talent but also subjects the organisation to ongoing Home Office oversight, strict compliance duties and wider tax and employment law considerations. A licence must be actively managed, with robust HR systems, accurate reporting and trained personnel in place. Businesses that treat sponsorship as part of their wider governance framework are best placed to minimise risks, withstand scrutiny and maintain long-term access to skilled workers from overseas.